Business software glossary

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Add on

A feature or capacity sold separately from the base plan, such as extra contacts, storage, calling minutes or AI credits.

Annual billing

Paying for a full year upfront. Vendors often advertise the annual price per month, which is usually lower than paying month to month.

Auto renewal

A contract term that renews the subscription automatically for another period unless you cancel before a notice deadline.

CRM (customer relationship management)

Software that stores customer and prospect records and tracks deals, conversations and follow ups.

Data portability

Your ability to export your data in a usable format so you can move it to another tool.

DPA (data processing agreement)

A contract that sets out how a vendor processes personal data on your behalf, required in many cases under privacy laws such as the GDPR.

Free plan

A permanent no cost tier with usage limits, unlike a free trial, which expires after a set number of days.

SaaS

Software as a service. Software you rent by subscription and use through a browser or app, with the vendor running the servers and updates.

Seat

One paid user licence. Per seat pricing multiplies the plan price by the number of people who need access.

Shelfware

Software licences that a business pays for but nobody actively uses.

SLA (service level agreement)

A contract commitment on uptime, support response times or other service levels, often with credits if the vendor misses them.

SOC 2

An independent audit report on a service provider's security, availability and confidentiality controls, widely requested when buying business software.

SSO (single sign on)

A way for staff to log into many business apps with one company identity, which makes access easier to manage and remove.

Total cost of ownership (TCO)

Everything a tool costs over its life, including subscription fees, add ons, setup, training, integrations, admin time and the cost of switching away.